Equatorial Guinea: Account for Oil Wealth

(Madrid)- The government of Equatorial Guinea has set new low standards of political and economic malfeasance in handling its billions of dollars in oil revenue instead of improving the lives of its citizens, Human Rights Watch said in a report released today.

The 107-page report, "Well Oiled: Oil and Human Rights in Equatorial Guinea," details how the dictatorship under President Teodoro Obiang Nguema Mbasogo has used an oil boom to entrench and enrich itself further at the expense of the country's people. Since oil was discovered there in the early 1990s, Equatorial Guinea's gross domestic product (GDP) has increased more than 5,000 percent, and the country has become the fourth-largest oil producer in sub-Saharan Africa. At the same time, living standards for the country's 500,000 people have not substantially improved.

"Here is a country where people should have the per capita wealth of Spain or Italy, but instead they live in conditions comparable to Chad or the Democratic Republic of the Congo,"* said Arvind Ganesan, director of the Business and Human Rights Program at Human Rights Watch. "This is a
testament to the government's corruption, mismanagement, and callousness toward its own people."

For example, infant and child mortality actually increased from an already-dismal 103 deaths per thousand in 1990 to 124 per thousand in 2007. Similarly, under-5 mortality rates increased from 170 per thousand in 1990 to 206 per thousand in 2007. The government's failure to provide basic social services violates its obligations under the International Covenant on Economic, Social and Cultural Rights, Human Rights Watch said.

The country has had a series of corruption scandals involving government officials and their families. In 2004, a US Senate investigation into the country's dealings with the now-defunct Riggs Bank detailed how President Obiang used the country's oil wealth to finance numerous personal transactions, including spending $3.8 million to buy two mansions in a suburb of Washington, DC. That investigation led to one of the largest fines against a bank in US history, and ultimately the bank's takeover.

Obiang's eldest son, Teodorin, bought a $35 million property in California in 2006. In 2004, he spent about $8.45 million for mansions and luxury cars in South Africa. His only known income was a $4,000 monthly salary as a government minister. His $43.45 million in spending on his lavish lifestyle from 2004 to 2006 was more than the $43 million the government spent on education in 2005.

The people of Equatorial Guinea have no ability to hold their government accountable. The government severely curtails press freedom and independent civil society, and the political opposition is weak and faces constant government harassment, intimidation, and arrests.

Obiang has been in power since 1979, when he deposed his uncle in a coup. His uncle, Francisco Macías Nguema, took control of the country when it gained independence from Spain in 1969. His rule was brutal and, by the time his nephew overthrew him, as much as a third of the population had been killed or exiled. In the most recent parliamentary elections in May 2008, Obiang and his allies won 99 out of 100 seats.

"Obiang controls the oil, the government, and the country," Ganesan said. "Without meaningful international pressure, the immense wealth of Equatorial Guinea will continue to be a private cash machine for a few instead
of the means to improving the lives of many."

The bulk of investment in the country's oil industry comes from US-based oil companies such as Exxon Mobil, Marathon Oil, Amerada Hess, and Vanco Energy. The significant interests of US companies have also meant that the US government is a key interlocutor with the government of Equatorial Guinea,
along with Spain. Under the Bush administration, relations with Equatorial Guinea warmed, despite the Riggs Bank corruption scandal and ongoing human rights violations. For example, former Secretary of State Condoleezza Rice publicly told Obiang during a 2006 visit to Washington: "You are a good friend, and we welcome you."

"The Obama administration should take a different approach than its predecessor," said Ganesan. "Instead of ignoring corruption and human rights in favor of energy interests, it can make it clear that good governance and respect for human rights is essential for energy security."

The international community may be in a good position to push for change because the government has joined the Extractive Industries Transparency Initiative (EITI), an effort to make natural resources benefit everyone by setting a global standard for openness in oil, gas, and mining. However, Human Rights Watch has serious concerns that the government may not be fully committed to it because it still has not guaranteed that civil society can operate freely in the country and has been very slow to implement the initiative's standards.

"This is a key test for the government," Ganesan said. "But it is also a test for the credibility of the initiative, which risks just endorsing a slightly more transparent dictatorship."

Human Rights Watch called on the government of Equatorial Guinea to carry out policies for complete public disclosure of how it manages its oil wealth, including: making its budgets public; identifying all of the government's foreign bank accounts; implementing the law that requires government officials to declare their assets, and verifying those declarations; and conducting an audit of government accounts and making those results public.

Human Rights Watch called on foreign governments such as the US and Spain to: put concerted pressure on the government to improve human rights; deny visas to the country's officials who have been implicated in corruption; and identify any assets held by those officials in their countries, with the intent of seizing the proceeds of corruption and eventually returning them to the people of Equatorial Guinea.

*This sentence was amended to more accurately reflect the child and infant mortality statistics to which it refers.